Monday, June 6, 2011

Halifax lawyer calls for "catastrophic" auto insurance

John McKiggan says medical benefits too low for severely injured.

A Halifax personal injury lawyer is calling on the Nova Scotia government to sharply increase medical rehabilitation benefits for people who sustain “catastrophic” injuries in car accidents. John McKiggan of the Atlantic Trial Lawyers Association says severely injured victims who need extensive treatment should be eligible for medical benefits of up to $100,000 and income replacement of up to $1,000 per week if they’re unable to work after an accident.

McKiggan, who served on an advisory committee to the Nova Scotia Automobile Insurance Review, says he welcomes its recommendation to double the current medical rehabilitation coverage from $25,000 to $50,000, but the trial lawyers feel more is needed for the relatively few people who suffer severe injuries.

“It is admittedly only a very small percentage of accident victims that would need that type of coverage, but when you need it, you really need it,” McKiggan says. “Consumers are always scared about rates increasing and the insurance industry always uses that as a threat, but because there are so few people who actually ever need that level of benefit, the additional premium cost would be infinitesimal.”

Review says no to catastrophic benefits

In releasing their recommendations last week, the consultants conducting the auto insurance review suggested that the province delay introducing catastrophic accident benefits until assessments of such a system are completed in Ontario and Alberta. The consultants also recommended increasing maximum disability benefits for those unable to work after an accident from $140 to $250 per week, far short of the maximum $1,000 per week the trial lawyers association called for in the most severe cases.

Aside from the recommendation to delay the implementation of catastrophic medical insurance, McKiggan seems relatively pleased with the results of the insurance review. He does say, however, that it doesn't mean much when the review recommends that consumers be given the choice to pay higher premiums in order to get the right to sue for pain and suffering awards over the $7,500 cap.

Under present rules brought in by the NDP government, accident victims who suffer so-called “minor” injuries arising from strains, sprains and whiplash, are limited to a maximum of $7,500 for pain and suffering. McKiggan says that while it’s a good thing to offer people the choice, most will not pay higher premiums for the right to sue for more money.

“The average consumer is looking for the cheapest insurance they can find and often they don’t realize what that means in the way of benefits when they actually need the coverage,” he says.

Injury cap limits ability to sue

As for the cap itself, McKiggan says the Trial Lawyers Association has always been against it “because we’re opposed to any legislation that limits people’s access to justice.” Besides, he says, the cap makes it harder for people who are not working at the time of an accident and who are not catastrophically injured to retain lawyers if they want to sue for damages. No lawyer could afford to take on such a case on a percentage or contingency basis if there’s a cap of $7,500, he says. And most people can't afford to hire lawyers and pay hourly fees.

“So, students, children, seniors, unemployed people, those folks who are particularly vulnerable, their entire claim may simply be the non-pecuniary damage claim, what most people refer to as pain and suffering, and if their claim is capped at $7,500, it may not be economically viable for someone to be able to retain counsel to pursue a claim for that.”

It’s a point that Darrell Dexter used to make forcefully when he was leader of the opposition. During an interview with the Coast on July 6, 2005, for example, the future premier said most Nova Scotians couldn’t afford to sue big multinational insurance companies on their own.

"Most people who suffer car accidents and motor vehicle related injuries reflect the general makeup of the people of this province. Fifty percent of them make less than $25,000 a year," he said. He added that the cap legislated by the Conservatives with the support of the Liberals effectively eliminated the ability to hire a lawyer on a contingency basis.

“ Essentially the legislation that the government brought in sacrifices the rights of victims of car accidents for the benefit of insurance companies. It just couldn’t be any clearer or more simple,” Dexter declared.

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